Beer

How Products Are Made
COPYRIGHT 1996 Gale Research Inc.

Beer

Background

The family of beverages generally referred to as "beer" has been brewed for centuries. Beers are obtained by the yeast fermentation of malted cereal grains, to which hops and water have been added. Brewing has evolved from a cottage craft into a modern industry where large breweries export their beers worldwide. On a per capita basis, Germans consume the most beer at about 40 gallons (151 1) per person per year. Beer drinkers in the U.S. rank fourteenth in the world, with American breweries producing approximately 156,900 million barrels of beer a year. Each barrel is the equivalent of 117 liters or approximately 31 gallons.

The true origin of beer can only be conjectured. Early attempts at brewing occurred around 7000 b.c. in Mesopotamia. The Egyptians and Greeks also brewed alcoholic beverages by various methods, but the term "beer" did not appear in these early languages. The Babylonians offered brewing recipes, and there are various references to beer in the Bible. The English word "beer" seems to stem from the Celtic word "beor," which referred to a malt brew made by monks at a North Gaul monastery. In the Middle Ages, monasteries were the leading producers of beer, and monks are credited with many early brewing techniques, such as the addition of hops to improve the aroma and help preserve the beer. The distinction between ales, lagers, and darker bock beers began to appear in French and Irish writings in the 13th century. It is generally accepted that the modern beers as we know them today date to the 1600s.

Beer brewing was already a thriving industry in Europe when the United States declared its independence in 1776. European immigrants brought their brewing skills to America and founded a thriving beer industry. Some technological advancements—the yeast separator, for example—made mass production of beer possible. Bottled beer was introduced in 1875 by the Joseph Schlitz Brewing Company in Milwaukee, Wisconsin, a city famed for its breweries. Canned beer first came on the market in the 1930s. The American beer market today is dominated by several large companies such as Miller and Anheuser Busch, though microbreweries and brew pubs that produce their own brands are becoming increasingly popular.

Raw Materials

Beer requires these ingredients for brewing: properly prepared cereal grain (usually barley and corn or rice), hops (scientific name Humulus lupulus), pure water, and brewer's yeast. Each ingredient can affect flavor, color, carbonation, alcohol content, and other subtle changes in the beer. Grains are carefully stored and handled to promote highest quality. Hops are a form of cultivated perennial hemp, and the useful portions of the vine, the sticky cones, are developed from the bloom. About 35 pounds (16 kg) of barley malt and 15 pounds (7 kg) of grain are used to make each 31-gallon barrel of beer. Large quantities of pure water are extremely important not only as an ingredient, but for maintaining the cleanliness of the brewing equipment. In beer, water high in lime or iron can interfere with the fermentation process and discolor the final product. Yeasts are fungi, which are microorganisms that reduce sugars
to alcohol by fermentation. Some types of brewer's yeast are closely guarded trade secrets.

Outside of the beer itself, the process also requires various acids and cleaning chemicals to maintain and sterilize the brewing equipment. The finished product also requires packaging, which includes card-board products for boxes, aluminum for cans, glass for bottles, and stainless steel for kegs and other commercial dispensing equipment. The majority of the brewing equipment is stainless steel, with the exception of the brew kettles, which are copper.

The Brewing Process

Malting

1 Fully ripened barley grains are "steeped," or soaked in cold water until they are fully saturated. The water is changed once a day, and after 45-72 hours the grains are placed in shallow tanks. The grain is aerated and stirred, which causes it to germinate, releasing enzymes such as malt diastase. Malt diastase converts the starches contained in the grain to sugar for fermentation. As soon as the germination is adequately complete, usually six days, the grain is roasted to stop the germination process. The exact point at which the roasting starts and ends affects the flavor and color of the beer. The product at this point is referred to as malt.

While amateur brewers swap recipes at will, the commercial recipes for beer are held tightly as any state secret. Until recent decades, the production of beer, like wine, was a wonderful combination of art, science, and luck. At the heart of the process has been the brewmaster, a traditional handcraftsman wrapped in the lab coat of a scientist and carrying the clipboard of a production engineer. In the 20th century, corporate breweries have evolved into an intriguing combination of flow production In the brewing process and automated canning, bottling, and warehousing.

In the 19th century, the brewing industry flourished as numerous brewmasters drew on their European heritages and functioned as chemists, biologists, engineers, inventors, and salesmen. The combination of local ingredients, water quality, and the brewmaster's traditions and skill meant that many regions, even locales, could have their own brands. Before mechanical refrigeration, pasteurization, and rapid transportation facilities, national distribution was, of course, impossible. One result of this was that the United States has always enjoyed a wide variety of regional beers. In 1867 there were breweries in every state and territory, an astonishing total of 3,700; in 1934 there were still over 800 in operation; in 1994 there wore about 500. After Prohibition and with the development of steel cans for beer in 1935, breweries shifted their focus away from primary interest in bars and toward home consumption.

Despite the seeming pervasiveness of national brands from the mega-breweries supported by their huge advertising budgets, this tradition of hundreds of local brands continues. In recent years it has even been augmented by the proliferation of so-called "microbreweries" which often display the brewing equipment as part of the decor of a drinking establishment and distribute their products primarily on-site.

William S. Pretzer

Preparing the mash

2 The malt is crushed using iron rollers and transferred to the mash tank (or "tun"). This tank is a large copper or stainless steel vessel that mixes the malt with warm water until it is of porridge-like consistency. This mixture is called mash. After mixing with similarly prepared cereal grains, the temperature of the mash is raised incrementally from 100-170°F (38-77°C) so that the enzymes react. The enzymes break down the starch in the grain and convert it to simple sugars. Later, the yeast will convert the sugars into alcohol. Once complete, the mash is allowed to sit undisturbed so the solids can descend to the bottom of the tank.

Brewing the wort

3 The liquid contained in the mash is transferred into another tank called a lauter tun. This is accomplished by drawing the liquid out through the bottom layer of mash solids, which acts as a filter. Hot water is added to the top of the mash tank to rinse the remaining liquid, now called wort, from the mash. The solid remains of the grain are dried and sold by the brewery as animal feed. The wort travels on to the brew kettles, where it is boiled to sterilize it, and where the carefully prepared hops are added. The addition of the hops is important because they contribute to the bitterness of the beer. The brew kettles are the most impressive equipment in the process. Gleaming copper, they can be 7-12 feet (2-3.6 m) in diameter and two stories high. Steam usually provides the heating energy to the brew kettles. After brewing is complete, the finished wort is filtered again and pumped to the fermentation tanks.

Fermenting

4 In the fermentation tanks, the atmosphere must be carefully controlled to prevent any "rouge" bacteria from interfering with the yeast. Carefully maintained yeast (approximately one pound per barrel of wort) is added to the wort, and the temperature of the mixture is slowly reduced over a period of days to between 50°F and 60°F (10-15°C). In this temperature range, the yeast grows, consuming the sugar in the wort, and bubbles of carbon dioxide form. The wort has now become beer. The new beer is filtered and transferred once more into the aging casks, where the temperature is controlled at 33°F (°C) for 2-24 weeks. The shorter storage time produces a pale lager beer while the European lagers (called
Pilsner) are aged longer to increase the alcohol content.

Pasteurizing

5 After aging, the beer can be pasteurized to kill the remaining yeast and prevent further alcohol production. This is accomplished by heating the beer above 135°F (57°C). This process, named after Louis Pasteur, is widely known for preserving milk. Interestingly, Pasteur originally developed this process to preserve beer in the 1860s. Pasteurization, however, is not used in the production of genuine draft beers. These beers are also known as "ice" beers, since they must be kept refrigerated to preserve their flavor and slow the remaining yeast activity. Many consider the draft beers best in aroma as well as taste.

Packaging

6 Whether packaged into cans, bottles, or kegs, the beer is always moved gently through the maze of piping in the bottling area. This is to preserve the natural carbonation. During bottling, additional carbon dioxide gas from the fermentation kettles is used to improve the aroma of the beer. High-speed packaging lines can process thousands of cases of beer per day, and with modern computerized control, the inventory can be tracked throughout the distribution network. Most beer is delivered from local distributors who have purchasing contracts with the major breweries.

Most beer is available in the following package sizes: "pony" cans and bottles of about 8 fluid ounces, standard 12-ounce cans and bottles, 16- and 32-ounce jumbo cans, 40-ounce "picnic" bottles, 8-gallon "pony" kegs, and the standard 16-gallon beer keg. Other novelty and party packages are also available. Cans and bottles are packed in 6, 8, 12, or 24 each to a box or case. Most states require a deposit at point of sale to encourage the return of the bottles and cans.

When beer is dispensed from the keg, a pressure apparatus called a "tapper" is used to apply a light pressure of carbon dioxide (usually 2-6 PSI) to the tapper head for dispensing.

Byproducts/Waste

Beer brewing produces several byproducts that can be used by other industries. During the malting of the barley, rootlets form on the grain and drip off. These can be collected and used for animal feed. The hops that is filtered out from the finished wort can also be collected and used again as fertilizer. The residual yeast from the brewing process is a rich source of B vitamins. It can be put to use by pharmaceutical companies to make vitamins or drugs, or used as a food additive. Used beer cans and beer bottles are routinely recycled.

The Future

Recently, concern among citizens' groups over the excessive consumption of alcoholic beverages by some individuals has initiated additional government regulation of beer. New warnings have been added to labels, warning of impaired driving, hazards to pregnant women, and other health ailments associated with alcohol consumption. Reduced tolerance for drunk driving, for example, encouraged many brewing companies to advocate responsible consumption. As a result, certain states have established laws to control the alcoholic content of beer for sale within their jurisdiction. The beer industry will continue to contend with these large social issues.

Much research is currently conducted in the area of plant engineering. Brewery researchers are manipulating the genes of barley and other common grains to increase their resistance to disease and to encourage helpful mutations. This genetic research also extends to improving the yeast. Current research is aimed at producing yeast strains that resist contamination and to making new varieties of yeast that can ferment carbohydrates, which common yeasts cannot process.

The brewing industry is also making advances in the area of rapid testing for contaminants. New technology such as DNA probes and protein and chromosome finger-printing is being developed by brewers to detect microorganisms that can adversely affect the brewing process. Some of this technology is already in use in medical science for drug screening, AIDS testing, and pregnancy testing. Brewers are eager to adapt this cutting edge research to the beer industry.

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beer

beerAlcoholic beverage made by the fermentation of cereals; traditionally barley, but also maize, rice, and sorghum. The first step is the malting of barley: it is allowed to sprout, when the enzymeamylase hydrolyses some of the starch to dextrins and maltose. The sprouted (malted) barley is dried, then extracted with hot water (the process of mashing) to produce wort. After the addition of hops for flavour, the wort is allowed to ferment. Two types of yeast are used in brewing: top fermenting yeasts which float on the surface of the wort and bottom or deep fermenters. Most traditional British beers (ale, bitter, stout, and porter) are brewed with top fermenting yeasts. See also barley wine.

UK beers, brown ale, and stout: around 3% alcohol by volume, 2–4% carbohydrate, 75–110 kcal (315–460 kJ) per 300 mL (half pint). Strong ale is 6.6% alcohol, 6% carbohydrate, 210 kcal (880 kJ) per 300 mL (half pint). Ale is a light‐coloured beer, relatively high in alcohol content, and moderately heavily hopped. Bitter beers are darker and contain more hops. Porter and stout are almost black in colour; they are made from wort containing some partly charred malt; milk stout is made from wort containing added lactose. Porter was first brewed in London in 1722, as a low cost beer for market porters.

Lager is the traditional mainland European type of beer, sometimes called Pilsner lager or Pils, since the original lager was brewed in Pilsen in Bohemia. It is brewed by deep fermentation.

Lambic, geuse, and weisse are strong sour beers made from barley or wheat, mainly in Belgium and Germany. Krieken lambic is cherry flavoured.

Lite beer is beer which has been allowed to ferment until virtually all the carbohydrate has been converted to alcohol and so it is low in carbohydrate and high in alcohol.

Low alcohol beer may be made either by fermentation of a low carbohydrate wort, or by removal of much of the alcohol after fermentation (de‐alcoholized beer).

Sorghum beer (African, made also from millet, maize, or plantain) is a thick sour beverage consumed while still fermenting. Also known by numerous local names, kaffir beer, bouza, pombé, Bantu beer. 3–8% alcohol, 3–10% carbohydrate, a rich source of vitamin B1 per 300 mL portion.

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beer

beer Alcoholic beverage produced by the soaking, boiling, and fermentation of a cereal extract (often malted barley) flavoured with a bitter substance (hops). Other ingredients are water, sugar, and yeast. The alcohol content of most beer ranges from c.2.5% to 12%. Among the major types of beer are: ales, which classically have fewer hops added; stouts and porters, which are darker and have a persistent head; lagers and pilsners, usually fizzy and matured over a longer period of time; bitter, which has additional hops; mild, which has few hops and is low in alcohol; and brown ale, similar to stout.

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Beer (in the Bible)

The Columbia Encyclopedia, 6th ed.

Copyright The Columbia University Press

Beer (bē´ər), in the Bible. 1 Unidentified place, to which Gideon's son Jotham fled. 2 Unidentified place, E of the Dead Sea between the Arnon and the Jordan, where Israel camped and dug a well. The little song quoted is one of the oldest poetic pieces in the Bible.

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beer (alcoholic beverage)

The Columbia Encyclopedia, 6th ed.

Copyright The Columbia University Press

beer, alcoholic beverage made by brewing and fermenting cereals, especially malted barley, usually with the addition of hops as a flavoring agent and stabilizer. One of the oldest of alcoholic beverages (there is archaeological evidence dating to c.3000 BC), beer was well known in ancient Egypt, where it may have been made from bread. At first brewed chiefly in the household and monastery, it became in late medieval times a commercial product and is now made by large-scale manufacture in almost every industrialized country, especially Great Britain, Germany, the Czech Republic, and the United States.

Although British, European, and American beers can differ markedly in flavor and content, brewing processes are similar. A mash, prepared from crushed malt (usually barley), water, and, often, cereal adjuncts such as rice and corn, is heated and rotated in the mash tun to dissolve the solids and permit the malt enzymes to convert the starch into sugar. The solution, called wort, is drained into a copper vessel, where it is boiled with the hops (which provide beer with its bitter flavor), then run off for cooling and settling. After cooling, it is transferred to fermenting vessels where yeast is added, converting the sugar into alcohol. Modern beers, typically lighter than ancient, contain about 3% to 6% alcohol.

Beers fall into two broad categories. Ales are made with yeast that ferments more quickly at warmer temperatures and tends to rise to the surface. Lagers use yeast that ferments more slowly at cooler temperatures and tends to settle, and they are aged at cold temperatures for weeks or months, hence the name [Ger., Lager=storage place]. Most major American beers are lagers; many are Bohemian Pilsners, a golden-hued lager. Bock beer, said to take its name from Einbeck, Prussia, where it was first made, is a heavier, usually darker lager. Pale ale is generally a light to dark amber, strongly hopped beer. Porter is a strong, dark ale brewed with the addition of roasted malt to give flavor and color. Stout, an ale which is darker and maltier than porter, has a more pronounced hop aroma and may attain an alcoholic content of 6% to 7%. Light, or low-calorie, beer is lower in alcohol content. Ice beer is a higher-alcohol beer produced by chilling below 32°F (0°C) and filtering out the ice crystals that form.

In the 1980s, consumer dissatisfaction with the taste and choice offered by major breweries led to the growth of more traditional
"craft"
breweries and microbreweries—firms that produce fewer than 15,000 barrels annually—especially in the United States. By 2010 there were in the United States several dozen regional craft breweries, more than 600 microbreweries, and more than 1,000 brewpubs (a microbrewery that sells mainly through its own restaurant or bar).

See G. Oliver, ed., The Oxford Companion to Beer (2011).

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Beer

Encyclopaedia Judaica
COPYRIGHT 2007 Thomson Gale

BEER

BEER (Heb. בְּאֵר; "a well"), the name of several biblical localities. (1) One of the stations where the Israelites stopped during the Exodus, north of the Brook of Zered in Transjordan (Num. 21:16–18). It is possibly identical with Beer-Elim (Isa. 15:8) in southern Moab. (2) The place where *Jotham, son of *Gideon, sought refuge when he fled from his brother Abimelech (Judg. 9:21). As this place is associated with the history of *Gideon's family, it is generally located north of the Jezreel Valley. The Septuagint mentions Beeroth, in the inheritance of Issachar, between Shion and Anaharath, i.e., in the vicinity of Mount Tabor (Josh. 19:19), where the Arab village of al-Bīra is located. Nearby is Khirbat al-Bīra, where remains of the early Israelite period have been discovered. The village was abandoned by its inhabitants during the War of Independence.

bibliography:

F.-M. Abel, in: jpos, 17 (1937), 42ff. (Fr.).

[Michael Avi-Yonah]

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Beer

Beer

INDUSTRIAL CODES

NAICS-Based Product Codes: 31-21201 through 31-21201231, 31-21204 through 31-21204291, 31-21207 through 31-21207121, and 31-2120A through 31-2120A151

PRODUCT OVERVIEW

Without question, the greatest invention in the history of mankind is beer. Oh, I grant you that the wheel was also a fine invention, but the wheel does not go nearly as well with pizza.—Dave Barry

Beer is believed to be the world's first alcoholic beverage. Its origins date far back into human prehistory. All beers are fermented undistilled beverages derived from grains. They are usually carbonated and have been hopped for flavor. Beer comes in a truly staggering variety of costs and styles. Within the beer section of an average market the consumer can now find an ever-increasing variety of brews ranging from inexpensive mass-produced brews to high-end craft brews, from light lagers to dark ales, and from light beers to very high-alcohol content malt liquors. The growing variety found among commercially distributed beers is the most important trend in the modern brewing industry.

The Brewing Process

Beer is created when yeast ferments a grain mash. For most beers, which are barley based, the process usually begins when raw barley is malted. In the malting process the starches in the barley are converted to sugars when the grain germinates after being soaked in water. The malted barley is then roasted in an oven, a process that carmelizes the sugars and adds flavor to the barley malt.

After roasting the malted barley is boiled in water to create a sugar-laden mash known as a wort. Hops, a flowering herb, are also added to the boiling wort. The hops impart additional flavor and aroma, and also act as a preservative in the finished beer. Once the wort has cooled, yeast is added. Yeast converts sugar into alcohol and carbon dioxide. The wort is then left to sit while the yeast converts the sugars into alcohol that remains in the beer and carbon dioxide that is vented from the wort container. Once all of the sugar in the wort has been converted to alcohol by the yeast, the wort is then decanted, filtered, and bottled or kegged.

Home brewers and some traditional craft brewers add carbonation to the final beer via a secondary fermentation stage in which a bit more sugar is added to the beer at the time of bottling. The remaining live yeast then creates a small additional amount of alcohol and carbon dioxide, which is now contained and allowed to build pressure within the bottle. However, the vast majority of modern commercially brewed beers add carbonation to the final beer by simply adding carbon dioxide gas at the time of bottling.

Beer is a fresh consumable. Once it has been bottled or kegged, the quality of a beer begins to deteriorate. This deterioration is speeded by exposure to light, so most brewers minimize the exposure of bottled beers to light by using green or brown glass instead of clear glass. High temperatures or sudden changes in temperature can also diminish beer quality, so much of the manufacture and distribution chain uses refrigerated trucks and storage.

History

Though nobody knows exactly when mankind began brewing beer, the history of brewing dates back more than ten thousand years. The long history and importance of beer is reflected in the English word beer itself, which derives from the Latin word meaning to drink, bibere, the same root that led to the French word biere and the German word bier. The Spanish word for beer, cerveza, not to be outdone for historic origins, traces its roots to the Roman goddess of agriculture Ceres.

The first beers were almost certainly accidental brews, produced when stored cereals spontaneously fermented by naturally occurring yeasts when the stored grain was accidentally moistened. The prehistoric origins of brewing coincide with the prehistoric origins of agriculture. While some believe that the cultivation of grains necessarily preceded the origins of brewing, other experts believe that mankind pursued farming to provide a steady source of grain for brewing. The written histories of Ancient Egypt and Mesopotamia record brewing and the distribution of beer, and the Epic of Gilgamesh describes beer's role in the transformation of primitive man to civilized man.

Beer was an important part of ancient societies, just as it is in the twenty-first century. Five-thousand years ago the Mesopotamians and Egyptians brewed at least nineteen types of beer that are still known about today. Beer drinkers used straws to consume these cloudy and unfiltered brews, so as to avoid consuming the bitter yeast residues that settled in the bottom of those early beers. Compensation for the laborers that built the ancient pyramids in Egypt and ziggurats in Mesopotamia often included beer. At times high officials received a beer ration as great as five liters per day, while laborers received a lesser quantity of perhaps two liters. The Greek philosopher Plato is believed to have said, "He was a wise man who invented beer."

Brewing continued through the Middle Ages and the Renaissance in northern and eastern Europe and all social classes drank beer. Wine consumption outpaced beer consumption in southern Europe due to the ready availability of grapes, but beer dominated the northern and eastern parts of Europe. People often preferred alcoholic beverages because the alcohol served as a disinfectant and made beer safer than the oft impure sources of drinking water available during the Middle Ages.

Brewing was primarily a household activity during the Middle Ages and it was not until the fourteenth and fifteenth centuries that artisans began brewing beer for a larger consuming body. Monasteries played an important role in the development of beer production on a larger scale. To this day beer varieties such as Trappist are still brewed by monasteries.

The production and consumption of beer was such an important issue during this period that in 1516 William IV of Bavaria adopted the Reinheitsgbot, a law to safeguard the purity and consistency of beer by regulating its production. German brewing in the twenty-first century is still regulated by this German Beer Law of 1516. The Reinheitsgbot restricts beer to four ingredients: barley, hops, yeast, and water. Any beer produced in or imported into Germany must meet the Reinheitsgbot. Some craft breweries and micro breweries in the United States use the German Beer Law and adherence to it as a marketing tool, a way to differentiate their own beers from their competitors'. Many large breweries today produce beers that can not be exported to Germany because they do not meet the standards set by the Reinheitsgbot.

Prohibition

During the early twentieth century the prohibition movement swept across the globe and took deepest root in North America and northern Europe. The movement stemmed from nineteenth-century temperance movements and the Protestant wariness of alcohol and its ill affects. The duration of these periods of prohibition varied; in the United States prohibition lasted from 1920 to 1933 while in Canada prohibition varied by province but lasted from 1900 to 1948 on Prince Edwards Island.

The United States passed the Eighteenth Amendment on January 16, 1920. This constitutional amendment prohibited the sale, manufacture, and transport of alcohol, but did not prohibit the possession and consumption of alcoholic beverages. In 1933 the Twenty-first Amendment to the U.S. Constitution repealed the nationwide prohibition. The amendment gave individual states the right to restrict or ban the sale of alcohol, leading to a patchwork of state and local laws designed to regulate the sale and consumption of alcohol. Many states continued to enforce prohibition after the Twenty-first Amendment was passed. In 1966 Mississippi became the last state to repeal prohibition

Post Prohibition Rebuilding

A growing number of problems created by prohibition itself drove the repeal of prohibition at the national level: a black market for high potency distilled alcohol, the high cost of enforcing the law, and a sharp increase in crime rates. The desire to create jobs during the Great Depression of the 1930s also encouraged the repeal of prohibition. Many people continued to brew and distribute beer and other alcoholic beverages during prohibition, but all this economic activ-ity happened on a black market basis. The government wished to legitimize the production of alcoholic beverages so that it could be regulated and taxed.

The passing of the amendment repealing prohibition went a long way toward solving the crime problem. The economic losses produced during prohibition took much longer to fix. Half of the breweries that operated in the United States prior to prohibition (1,345) went out of business and did not re-open after the repeal. By 1939 only 672 breweries operated in the United States according to the United States Brewers Almanac.

During the post-prohibition era great consolidation took place within the U.S. brewing business. The largest brewers had maintained operations during prohibition by producing "near beer," root beer, ginger ale, and other malt beverages with under one percent alcohol contents. They grew rapidly because they were more easily able to pick up production than those brewers who had discontinued production during prohibition. They also lobbied heavily after repeal for legislation that favored the large brewers by making production of beer legal only in large quantities for commercial distribution. In the decades following repeal the largest breweries grew and consolidated their market position while the variety of beer they provided to consumers decreased in variety. Before Prohibition a rich variety of local styles with roots in the many origins of American people themselves characterized American brewing. After the repeal of Prohibition light pilsener-style lagers with mass-market appeal dominated the American market.

In 1978 President Jimmy Carter signed legislation that legalized small-scale home brewing. This change led to a rebirth in the U.S. brewing industry. Home brewing expanded rapidly in the late 1970s and 1980s, and many of these small home breweries grew beyond the home base into small commercial breweries, microbreweries and pub breweries. Microbreweries grew between 5 and 7 percent of the total U.S. beer market by the turn of the century. These microbreweries have had a disproportionate impact on the U.S. industry despite their small size by bringing diversity back to American beers in the form of specialty and craft beers that featured new flavors and tastes. The big-three brewers, Anheuser Busch, Miller, and Coors all began introducing boutique brands and specialty beers of their own in the late 1990s and 2000s to compete with domestic microbrews and the growing numbers of imported beers.

Globalization

Beer markets had always tended to be local or regional until the end of the twentieth century. Although beer had always been imported and exported in the United States it was during the 1990s that foreign producers began to make deeper inroads into this vast market. By the early 2000s imports accounted for close to 12 percent of the U.S. market, and the United States had become the largest beer importing country in the world. In return U.S. producers established exporting networks through licensing agreements abroad and had made great inroads of their own by the early 2000s.

In 2002 the large African beer maker South African Breweries (SAB) bought Miller Brewing Company, the second largest U.S. beer maker and a long-time industry leader. The early 2000s marked another change in the global beer landscape as China surpassed the United States as the country with the highest total beer consumption. Neither country ranks in the top ten on a per capita basis, but the United States had long been the leader in total consumption.

Beer Types

Beers are generally categorized as ales or lagers by the behavior of the yeast used in the fermentation process used to brew the beer. Ales use top-fermenting yeasts that ferment the sugars of the wort more quickly and at a higher temperature than lagers. Ales are often brewed at a temperature above 55 degrees Fahrenheit. This warmer temperature tends to create a faster brewing process that brings more of the secondary flavors out of the barley malt, creating beers with fuller, more complex flavors. The faster brewing times and more complex flavors make ales a favorite of brewpubs and microbreweries.

Lagers use bottom-fermenting yeasts that ferment the sugars of the wort at a lower temperature than lagers. Ales are often brewed at a temperature well below 55 degrees, sometimes as low as 40 degrees. Lager yeasts take longer to consume the sugars in the wort at these lower temperature, and this slower brewing process creates a crisper, cleaner tasting beer. The crisp and light flavor of lagers make them a favorite of mass-market breweries.

Spontaneous fermentation with wild yeasts produces lambic beers. In tightly controlled brewing, wild yeasts can create a variety of off flavors, but those flavors are valued in the unique taste of lambic beers, which often have a sour flavor. The wild nature of these yeasts lead to very brewery-specific tastes for lambic brews.

In addition to the differences in taste imparted by different yeasts and brewing processes, brewers create a wide spectrum flavors for specific beers through their choice of the roast of the malted barley, the use of adjunct grains, the sugar content of the wort, and the variety and quantity of hops. Darker beers such as porters and stout use a very deeply roasted barley malt that has been roasted to the point of charring and imparts a dark color and a burnt flavor similar to coffee, cocoa, or caramel. Some brewers use caramel to darken and flavor their dark beers. Lighter roasts create more lightly flavored beers such as pilsner lagers and summer ales.

Brewers also use adjunct grains such as wheat, corn, and rice to create a lighter flavor in a beer, or simply to reduce the cost of the final brew by increasing the quantity of sugar in the wort without using more expensive malted barley. The mix of malt and water determines the sugar content of the wort, which then determines the alcohol content of the beer. Contrary to popular belief, darker beers do not have an inherently higher alcohol content. The renownedly dark Guinness Stout Draught clocks in with a relatively light 4.0 percent alcohol content while the much lighter-tasting Miller High Life has an alcohol content nearly a third greater at 5.5 percent.

The type and quantity of the hops impart a great deal of the final flavor of a beer. Hops act as a preservative in beer, but the oils and flavors from the hops also give a beer much of its odor and its distinctive bitter zing. Most domestic lagers are lightly hopped for a smoother taste, while many ales and darker lagers tend to have a stronger hop taste. India Pale Ale (IPA) is an especially hoppy variety of beer. Its basic recipe was created when British brewers added extra hops to kegs of ale being shipped to India to ensure that they were well-preserved. Some modern microbrewers take hopping to the extreme with brews such as the Hopslam from Bell's Brewing, a double-hopped IPA that touts is extreme hoppiness in its name.

The basic recipe used by most mass market brewers is a pilsner lager based on the style of lager brewed in Pilsen, Bohemia. The Pilsner Urquell lager from Pilsen that is often cited as the first true pilsner lager was first brewed by brewer Josef Groll in 1842. This imported full-barley beer can now be found in stores across the United States. The modern American pilsner shares its light golden color and high carbonation, though most mass-market brewers use adjunct grains such as wheat, corn, and rice in addition to barley to brew their version. Domestic pilsners such as Budweiser, Coors, and Miller Genuine Draft usually average around 5 percent alcohol content.

MARKET

The world beer market in 2003 measured 1.484 million hectoliters, equal to 39.2 million gallons. This represented an increase of 2.3 percent over the 2002 world sales figure. The dollar value of beer sales worldwide in 2003 rose at a greater rate than did volume sales, increasing by 10.2 percent over value shipments in 2002. Beer got a bit more expensive.

Beer shipments by U.S. brewers grew steadily in the early 2000s, increasing from $16.5 billion in 2000 to $20.8 billion in 2005 according to data published by the U.S. Census Bureau in its Annual Survey of Manufactures. These shipments were for sales by breweries to wholesalers and distributors and did not include imports.

The popularity of imported beers also grew in the early 2000s as did the value of imports to the United States. In 2000 the U.S. imported $9.4 billion worth of beer, equal to 11.8 percent of industry shipments that year. In 2005 the U.S. imported $10.5 billion worth of beer, 13.1 percent of industry shipments. Per capita consumption rates of beer, however, have decline slightly during the early 2000s.

In the late 1960s per capita consumption of beer stood at 16.5 gallons annually. Consumption rose through the 1970s and peaked at 24.6 gallons in 1981. The 1980s and early 1990s saw per capita consumption rates of beer in the range of 22 to 24 gallons. In the mid-1990s beer consumption began to fall slightly and in 2005 stood at 21.3 gallons per person per year. Figure 19 presents these data graphically.

Figure 19 also shows the median age of the U.S. population which rose steadily over the period shown, 1966 through 2005. This period coincides with the coming of age of the Baby Boom generation, those born after World War II through the early 1960s. Since consumption of beer is highest for those in their 20s the peak of per capita beer consumption logically occurred when the large Baby Boom generation was reaching and pass through its 20s and early 30s. Starting in the early 1980s, per capita beer consumption rates began to fall, if slowly.

At the same time the number of microbreweries and specialty breweries in the United States began to rise. According to data complied and published by the Beer Institute there were a total of eight specialty breweries operat-ing in 1980. By the turn of the century just shy of 1,500 such breweries were registered in the United States. As the per capita consumption of beer fell slowly, the types of beer being consumed began to shift towards a more varied beers and more expensive beers.

A total of 1,367 brewers operated in the United States in 2005. The Beer Institute characterized twenty-one of these brewers as traditional brewers and the remaining 1,346 as specialty brewers. The traditional brewers are the large, industry leaders by volume, while the specialty brewers include microbreweries and brewpubs, most of which produce specialty beers and craft beers. This large number of specialty brewers highlights the dramatic changes that have taken place in the U.S. beer brewing market during the last half of the twentieth century. In 1960 there were only 175 brewers in the United States.

KEY PRODUCERS/MANUFACTURERS

Three companies—Anheuser-Busch, Coors Brewing, and Miller Brewing—dominate the beer industry in the United States. Together they accounted for nearly 80 percent of the market in 2005. Of the many small breweries in the marketplace, a small number stand out as a second tier of key players. Microbreweries are by definition small and thus no single one of them appears as a particularly large player in the market, although their influence on the industry as a group is significant. Craft beers have been traditionally thought of as beers produced by micro-breweries. As many of the microbrewers grew beyond the bounds of this category they did not change their beers and thus craft beers are now produced by beer makers of every size.

Anheuser-Busch

Started in 1852 as a Bavarian Brewery in St. Louis, Missouri, this company had a U.S. market share in 2006 of just under 50 percent, making it the largest U.S. beer maker, a position it has held since 1957. Eberhart Anheuser acquired the Bavarian Brewery in 1860 and took his son-in-law, Adolphus Busch, as a partner later that decade. In 1879 the name of the company was changed to Anheuser-Busch Brewing Association and by 1901 the company reached the threshold production figure of one million barrels of beer in a single year.

Today, Anheuser-Busch operates 12 breweries in the United States and has operations around the world. It produces more than 60 beers and flavored drinks. Among these are leading brands Budweiser, Bud Light, Budweiser Select, Busch, Michelob, Natural Light, and Ultra Amber to name but a few. Its net income in 2006 was $1.97 billion on gross sales of $17.96 billion. It is worth noting, however, that these financial results include all divisions of Anheuser-Busch, including those involved in the transportation and entertainment sectors.

Coors Brewing Company

This company dates back to the early ninteenth century and is a leading beer maker that employed over 11,000 people worldwide in 2006. It operated 10 breweries in three countries. Its operations are divided into three divisions which correspond to the countries in which it operates; Canada, the United Kingdom, and the United States. It marketed more than 40 brands of beer in 2006, including Carling, Coors, Coors Light, Blue Moon, Keystone Light, Killians Irish Red, and Molson Canadian. Coors Brewing Company had net income in 2006 of $361 million on net sales of $5.85 billion.

The Miller Brewing Company was the United States' second largest brewing company in 2002. The company was formed by Fredrick John Miller in 1855 in Milwaukee, Wisconsin. It grew and expanded, managing to stay in business through prohibition and expanding again after the repeal of prohibition.

Miller Brewing Company was purchased in 1969 by the Philip Morris Corporation but continued to operate under its well-known name. It launched the first nationally available brand of low calorie beer, Miller Lite, in the mid 1970s. Philip Morris Corporation, renamed Altria in the 1990s, sold the Miller Brewing Company in 2002 to the large, international beer maker South African Breweries (SAB). The resulting company was named SAB-Miller plc.

Second Tier Market Leaders

Most of the brewers that make up the second tier of the industry started off as microbreweries and grew to be brewers too large to be categorized as micro. Some of the prominent players in this second tier of the industry are names familiar to beer drinkers by their company names and others are known only by their brand names. The Boston Beer Company is an example of the latter. It makes the Sam Adams line of beers. Sierra Nevada Brewing Company is an example of the former category, marketing a line of beers whose brand name includes the Sierra Nevada prefix. New Belgium Brewing Company, headquartered in Colorado is a second tier brewer that markets such craft beers as Fat Tire, Sunshine, and Blue Paddle. The Texas based Spoetzl Brewing Company produces a line of beers called Shiner: Shiner Light, Shiner Bock, Shiner Blonde, and Shiner Kolsch. The F.X. Matt Brewing Company is another second tier brewer whose company name may be unfamiliar but whose products are well known in the northeast. It produces a line of beers which share the Saranac name: Saranac Lager, Saranac Black Forest, and Saranac Pale Ale to name a few.

The second tier brewers tend to focus on regional markets, although a few of these brewers have achieved national distribution during the later years of the twentieth century. Of those listed above, only Boston Brewing Company and Sierra Nevada Brewing Company have national distribution. The others market regionally, as does the Dixie Brewing Company out of New Orleans, Louisiana, maker of such provocatively named craft beers as Dixie Jazz and Blackened Voodoo. To rank this diverse group of brewers is a task the undertaking of which, although enjoyable, would take years.

Leading World Producers

In 2006 the three largest brewers in the world were InBev of Leuven, Belgium, SABMiller headquartered in London, England, and the U.S. market leader Anheuser-Busch which makes its home in St. Louis, Missouri. InBev global brands include Stella Artois, Beck's, Leffe, and Brahma. Other large brewers on the world stage are Heineken and Carlsberg, both of Germany, Grupo Modelo of Mexico, Tsingtao of China, Guinness of Ireland, and Kirin of Japan.

This list is incomplete and includes primarily brewers whose beers are exported beyond their national boundaries. Within most countries there are brewers of all sizes whose products are consumed in large quantity but are not seen on the global landscape because of their focus on domestic markets. Globalization is influencing the beer industry as it is most others but local, regional, and national beers are still important players within this age-old trade.

MATERIALS & SUPPLY CHAIN LOGISTICS

The basic ingredients of beer—and in the minds of some, the only legitimate ingredients—are water, barley, hops, and yeast. Flavorings and preservatives are sometimes added to beer as well but the four basic ingredients make up the bulk of the materials consumed in making beer.

Water

The quality of the water used to brew beer is perhaps the most important of these ingredients. By volume in the end product it is certainly dominant, but its quality too, is an essential part of the brewing process. The mineral components in water, which vary from one source to another, have an effect on the taste and appearance of beers made with that water. The water available in an area dictates the type of beer that can be produced locally and has contributed to the evolution of different beer styles. Stouts are famously produced in Ireland, specifically in and around Dublin. The reason for this has to do with the hard water supplying the Dublin area. By contract, the pilsner beers made in Pilsen, Czech Republic are renowned for their X flavor which is a direct result of the soft water available in the City of Pilsen. Water from either city could not be used to produce the other city's beer.

Barley

While many beers are true to the Reinheitsgbot (the German Beer Law) requirement that beer contain only the four basic ingredients, many beers are brewed with what are referred to as fillers. These are used in order to replace the relatively more costly ingredient of barley with other starches that will ferment and produce alcoholic. These alternate ingredients—corn, rice, and other grains—also produce different flavors. Sugar is often added in other forms as well in order to speed the production process.

Hops

The use of hops in brewing contributes primarily bitterness, aroma, and flavor to the beer. However, hops also provide other attributes to the resulting beer such as better head retention, fewer unwanted proteins, and some anti-bacterial properties. By removing unwanted proteins, the use of hops can contribute greatly to achieving a clearer beer, favored by many Americans. Their potential to give beer a bitter taste makes the use of hops a matter of getting the right balance in order to gain the benefits without tipping the scale on bitter taste.

Yeast

Yeast is the catalyst in the beer brewing process as it is yeast that is responsible for converting fermentable sugars into alcohol, carbon dioxide, and other byproducts. There are hundreds of varieties and strains of yeast; the ones most commonly used in the brewing of beer are those in the Saccharomyces cerevisiae class of yeasts. Yeast often known as ale yeast is a top-fermenting type, while lager yeast is a bottom-fermenting type of yeast. Top-fermenting yeasts are typically used to brew ales, porters, stouts, and wheat beers. Bottom-fermenting yeasts are used to brew Pilsners, Dortmunders, Märzen, Bocks, and American malt liquors.

Packaging Materials

Other than the cost to compensate employees and workers, the largest single category of material inputs to the brewing business is the cost of packaging materials used to prepare the beer for distribution. Cans are by far the dominant method for packaging and distributing beer in the United States where 90 percent of beer is sold in cans. Consequently, the cost of metal cans, boxes, and other containers (not including glass), represented 9.8 percent of all inputs into the U.S. beer brewing industry at the turn of the century according to the Census Bureau.

DISTRIBUTION CHANNEL

The distribution of beer in the United States is a three-tier system. The system was established through legislation after the repeal of Prohibition in 1933. U.S. regulations require that brewers sell to wholesalers or distributors who control the distribution of beer to restaurants, bars, and stores. Thus, the three tiers of the system are producers, distributors or wholesalers, and retailers. Some beer wholesalers have locations throughout the United States but most are regional. Wholesalers are either brand exclusive or independent multi-brand wholesalers. The brand exclusive wholesalers are often partially owned by the breweries whose beers they distribute. In 2002 there were 2,561 beer and ale merchant wholesalers operating in the United States who together generated sales of $44.35 billion according to the Census Bureau's 2002 Economic Census. Firms were active in every state of the Union and employed slightly more than 100,000 people.

The Beer Institute provides data on the number of beer distributors that are operating in the United States and their figures differ slightly from those of the Census Bureau, due to differences in how each defines a distributor. Nonetheless, the trends toward consolidation in the ranks of beer distributors is noted by both data series. According to the Beer Institute's Brewery Almanac 2007, there were just over 5,000 beer distributors operating in the United States in 1980. By 1990 that number had fallen to just shy of 3,000, and in 2004 the Beer Institute reported a total number of 1,907 beer distributors. Their numbers are shrinking but the volumes of product moving through these distributors has been growing, as has been seen in per capita consumption rates. The complexity of federal, state and local level regulation of the alcoholic beverage market is part of what has encouraged distributors to consolidate.

Individual states within the United States have their own regulations related to the consumption, distribution, and sale of alcoholic beverages within their borders. States control the licensing of establishments that sell alcoholic beverages, establish the hours in which it is permissible to sell these beverages, and regulate the distribution of these beverages as well. Some states even exert control over the sale price of alcoholic beverages and others operate state-owned distributorships. Distributors must manage this web of different regulations.

Distributors play an important role in the channel. They have the ability to monitor the sale of beer from the time the beer leaves the brewery until it arrives at a licensed retail outlet. This makes them an ideal point in the distribution system at which to collect state taxes and many states find it easier to collect taxes from a limited number of federally licensed beer distributors than from the far more numerous retail establishments that sell to the public. Other states collect taxes from the final retail outlet.

Managing the distribution channel in order to complement marketing efforts and assure that a steady supply of product is always available to the public is a challenge, as in the case of any perishable product.

Beer distributors sell their beer to a wide variety of final outlets, including bars, restaurants, stadiums, mass marketers, supermarkets, liquor and package stores, drug stores, convenience stores, and other retailers. The ability of an individual retail channel to sell beer and other alcoholic beverages is controlled by state law. Beer is generally more widely available than wine or liquor in many states, but the availability of beer, wine, and liquor in retail markets varies by state.

KEY USERS

Beer consumers tend to be young and male. According to the 2005 Beer Handbook from Bev-AL Communications, beer consumers are 61.7 percent male and 38.3 percent female. Men tend to prefer heavier, imported, and craft beers. The percentage of male consumption rises to 69.2 percent for regular beers, 68.0 percent for high-alcohol ice beers, 65.3 percent for imported beers, and 69.5 percent for craft beers. Women tend to prefer lighter, low-alcohol beers. The percentage of women consumers rises to 40.3 percent for light beers and 41.5 percent for non-alcohol beers. Surprisingly, since women otherwise prefer lower-alcohol beers, women also account for more than their usual share of beer consumption in the malt liquor segment. Women consumed 41.1 percent of malt liquors, which tend to be higher in alcohol content than the average beer. This may be an artifact of advertising and marketing that presents these beers as an alternative to beer, which is itself an historic artifact of some state labeling laws that banned presenting these high-alcohol brews as beer.

While women trail behind men in beer consumption there are several closely related markets in which they close the gap and even surpass men. Women consume 45.9 percent of hard ciders and lead men 60.5 percent to 39.5 percent in the consumption of malted beverages and prepared cocktails. The gap widens to 69.1 percent to 30.1 percent for wine coolers. These beverages have often been designed and marketed specifically for female consumers as an alternative to beer. Figure 20 presents selected rates of consumption by gender from Bev-AL's Beer Handbook.

Young consumers lead all beer consumers. Those in the 21 to 24, 25 to 34, and 35 to 44 age groups all account for significantly above-average beer consumption. Consumers aged 45 to 54 tend to consume beer in proportion to their overall population numbers, while beer consumption drops for those over the age of 55.

Beer consumers are also distinguished by race and many beers are marketed to target ethnic groups. According to 2003 statistics from the Simmons Market Research Bureau, caucasians purchase more light beer and micro/specialty beers than do consumers in general. African Americans purchase three times as much malt liquor and nearly twice as much ice beer as do consumers in general, while Asians and Hispanics purchase more imported beers than the general consumer. Light beers find less favor among African Americans and Asians, who purchase 1/3 to 1/2 less light beer than the overall market. African Americans also purchase just one-third as much micro/specialty beer as consumers in general. These trends are reflected in marketing campaigns. Malt liquor and ice beer advertising often aims at an urban target, while Asian beers and Mexican beers are aggressively marketed at those ethnic communities.

Retail beer purchases follow the age and gender consumption trends. According to statistics gathered by the Convenience Store News Shopper Panel in 2003, the average beer buyer between the ages of 21 and 29 accounted for 54 percent more retail beer purchases than the average adult, buyers aged 55 and above accounted for 41 percent fewer retail beer purchases than the average adult, and men accounted for approximately 10 percent more retail beer purchases than women. Beer is often a convenience purchase both for these young male consumers and beer consumers as a whole. The same study showed that nearly 2/3 (66%) of beer purchases were made through convenience stores, liquor/package stores, or drug stores, while just slightly more than 1/3 (34%) of beer purchases took place through destination shopping locales such as supermarkets or mass merchandisers.

Brewers target this young, male demographic and design their advertising and marketing campaigns accordingly, which is why most beer advertisements feature sports, attractive women, and humor. However, the rapid proliferation of beer varieties has also been accompanied by a proliferation of target marketing, with brands and marketing campaigns designed for all sorts of beer drinkers. All major brewers also offer beverages such as ciders, malt beverages, prepared cocktails, and wine coolers to be sure to appeal to all segments of the alcohol-consuming public.

ADJACENT MARKETS

The most obvious markets adjacent to the beer market are those for other alcoholic beverages. In the United States beer has always held a strong market position relative to other alcoholic beverages based on per capita consumption. Beer has consistently accounted more than 80 percent of all alcoholic beverage consumption in the United States based on per capita consumption figures. For the period 1966 through 2005 it averaged 86.5 percent according to the U.S. Department of Agriculture's Economic Research Service. However, over this period, wine gained market share, increasing its per capita consumption from 1 gallon in 1966 to 2.4 gallons in 2005.

Wine is an alcoholic beverage produced from the fermentation of unmodified grape juice. Grapes have a natural chemical balance which allows them to ferment without the addition of sugars, enzymes, or other nutrients. The top wine producing countries include, in order of 2005 production, Italy, France, Spain, Argentina, and the United States. Wine sales in the United States surged beginning in 1970 and were then flat or falling during the 1980s. The declines were attributed to the nationwide increase of the drinking age to 21, health and fitness concerns that discouraged alcohol consumption, label warnings for sulfites and for pregnancy, and lowered state blood-alcohol levels in driving-under-the-influence laws.

Beginning in 1994, sales began to climb steadily again and were continuing to grow in early 2007, when the report was written. The council attributed the renewed growth to a number of factors, including new reports that moderate wine drinking is good for health, increased and improved marketing campaigns, and the fact that the large millennial generation (those aged 21-30 in 2006), children of the Baby Boomer generation, was adopting wine drinking at a younger age than earlier generations.

Wine is still a distant second by volume within the three-product alcoholic beverage category. By value of shipments, however, it is much closer to beer, generating nearly half the domestic, wholesale shipment value that was generated by beer shipments in the United States in 2005. The value of domestic wine shipments in 2005 was $10.5 billion, according to the Census Bureau, while beer shipments were $20.8 billion, exclusive of imports for both products. Brewers are watching the growth in popularity of wine closely.

Distilled Spirits

The third product category within the larger alcoholic beverage sector has been declining. The consumption of distilled spirits or hard liquor in the United States has been on the decline for several decades. In 1966 the per capita rate of consumption of hard liquor was 1.6 gallons, exceeding wine's one gallon per person annual consumption rate in the United States that year. Hard liquor per capita consumption rose during the 1970s to a high of 2 gallons, and then began to decline. As of 2005 the annual consumption of distilled spirits in the United States stood at 1.4 gallons per person, well below the 2.4 gallon level of wine.

New flavors are being used to try and attract a new and younger consumer base for hard liquor. A new and younger consumer is seen as a way to counter act the decline in consumption seen in recent decades and often attributed to the aging of the population and concerns about health generally. Home distilling is also a trend that promises to increase demand for hard liquors as more people experiment with making craft liquors and acquire a taste for the drink.

Containers

The glass bottle and aluminum can markets are also important adjacent markets to the beer market. For producers of both of these types of containers, brewers continue to be important buyers. In fact, glass beer bottles have so far been a notable holdout in the transition of beverage bottles from plastic to glass.

Other Adjacent Markets

Beer advertisements are an important revenue stream for broadcasters, print, and Internet media organizations that in turn support a wide variety of entertainment activities, most notably professional sports. Anheuser-Busch alone spent $466 million on television advertisements in 2006, according to ACNielsen Monitor-Plus.

RESEARCH & DEVELOPMENT

Though it may seem there is little room for innovation with a traditional product such as beer, both manufacturing pressures and competitive markets have led to continuous innovation by brewers. As a manufacturing industry, large-scale brewers have taken advantage of many of the same sorts of technological innovations that have benefited other manufacturers. Where once a brewmaster relied on just his senses and experience to brew a batch of beer, now increasingly sophisticated control systems monitor everything from the germination rate of malting barley to the specific gravity of worts, allowing the brewmaster to precisely adjust the brew throughout the brewing process to ensure a more consistent product. Meanwhile, craft breweries and microbreweries consistently show an unending desire to try new and different beer recipes, experimentation which constantly introduces new tastes into the market.

The St. James Gate Brewery, maker of Guinness Stout, is a good example of the combination of tradition and innovation to be found among large-scale brewers. The St. James Gate brewery was founded in 1759 and in 1901 they established a research laboratory of their own to improve the manufacture and delivery of its beers, and the success of that laboratory has created a global market for Guinness Stout. Whereas once a true pour of their stout could only be found in Ireland, improvements in the taps used to pour Guinness Stout mean that the modern consumer can now find a good pint nearly anywhere in the world. A similar smooth and creamy pint of stout can also now come from an individual can or bottle, thanks to a small nitrogen pressurization widget that Guinness introduced into cans in 1988 and later to bottles in 1999. Other manufacturers such as S&N, Bass, Courage and Carlsberg-Tetley soon followed the 1988 introduction of Guinness's nitrogen widget with widgets of their own, and the technology can now be found in a wide variety of stouts, porters, bitters, and other draught-style beers.

As with widgets, much of the innovation in the beer industry that is most apparent to the consumer comes in the form of retail packaging designed to improve the delivery of an individual beer to a consumer. In 2005 Heineken introduced a portable draught keg that contains 4.75 liters of beer under pressure from carbon dioxide. Once opened, the keg stays pressurized for up to 21 days, which means that individual glasses of beer can be poured at a consumer's leisure. Many brewers have also introduced dates to their labeling. Because the quality of beer deteriorates over time, labeling that indicates the age of an individual bottle can be of great help to the consumer seeking the freshest possible beer.

Glass-lined cans have been another important development for the beer industry. Designed by the Ball Corporation, glass lined cans produce a similar taste to bottled beers, thus unaffected by its aluminum container. The glass-lined cans allow producers to package their beer in a package like aluminum to allow for a lower breakage rate than bottles, while protecting its taste. Consumers are also able to bring beers camping, hiking, and boating that they would not normally be able to due to the packaging. Oskar Blues Cajun Grill and Brewery in Lyons, Colorado, became the first brewpub to brew and can its own beer in 2002. The brewpub utilizes glass-lined cans produced by the Ball Corporation in Golden, Colorado.

CURRENT TRENDS

The U.S. craft brewing renaissance has had a significant affect on the market. Craft brewing is the fastest growing segment of the alcoholic beverage industry. While 2004 proved to be a difficult year for the industry as a whole, the craft beer segment grew at a rate of 7 percent. Moreover, craft brewers have been able to grow at the expense of importers during 2000–2004.

In 2006 microbreweries made up 10 percent of the U.S. beer market, with over 1,300 microbreweries. Sales increased by 16 percent from 2005 to 2006. Brewpubs, restaurants and pubs with an on premises brewery that serve the majority of their beer to customers on site, are gaining popularity and growing along with the beer industry in the twenty-first century renaissance. The craft beer industry, such as microbreweries and brewpubs, grew by almost 12 percent in 2006. In recognition of this growing segment, beginning in 2000, Sam Adams brewery started sponsoring a contest for the best home brewed beer. Each year since then there have been three winners whose beer has been put into production as a special brew and distributed by Sam Adams.

Large-scale brewers have countered an ever-growing number of small competitors by introducing new and different beverages as well as by taking popular brands and extending the brand across multiple products. Where Budweiser once stood alone as "The King of Beers," the king now has an increasingly crowded court that includes Bud Light, Bud Ice, Bud Dry, and Budweiser Select. In this increasingly crowded market, brewers must also fight for market share amid a declining overall share of the alcoholic beverage market. Beer sales fell from 56 percent of the alcoholic beverage market in 1999 to just 53.2 percent of the market in 2004, according to the Distilled Spirits Council of the United States. Total sales of beers and flavored malt beverages increased by just 1 percent from 2003 to 2004 according to the National Beer Wholesalers Association, and beer sales by themselves were actually down in that year.

For the foreseeable future brewers will continue to extend brands and introduce new beverages to compete in this increasingly diverse marketplace.

TARGET MARKETS & SEGMENTATION

As with many products and services, the next big, national market on the horizon for the beer industry is China. In fact for the first time ever, China consumed more beer than any other country in the world starting in 2003. Its enormous population accounts for the top ranking, but the rise of beer consumption in China also speaks to a developing taste for the drink. In 2003 China consumed 25 million kiloliters compared with 23.8 million kiloliters consumed in the United States. China's consumption rose to 28 million kiloliters in 2004 while the U.S. consumption figure remained reasonably steady at 24 million kiloliters.

On a per capita basis, neither the United States nor China even rank in the top ten by country. The Czech Republic, Ireland, and Germany ranked first, second and third in terms of per capita beer consumption in 2004. Their respective rates of per capita consumption were 157 liters, 131 liters, and 116 liters. The United States had a per capita consumption of 81.6 liters in 2004 and China's rate was 22.1 liters.

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Beer

St. James Encyclopedia of Popular Culture
COPYRIGHT 2000 The Gale Group Inc.

Beer

Given Americans' love of beer, one might be tempted to call it America's drink. In truth it is the world's drink. Originating in ancient Babylon, and passed on in various regional variations for thousands of years, beer is made in virtually every country in the world. Throughout Europe, but especially in Germany, Czechoslovakia, and the United Kingdom, the public house or alehouse serving locally-brewed beer has been an institution for hundreds of years. In Belgium, Trappist monks have been producing their distinctive beers since the eleventh century. But it wasn't until the twentieth century that beer was subjected to the peculiar modernizing effects of American mass culture. Mass-produced, packaged, and advertised everywhere, American lager beer in its various similar-tasting brands—Budweiser, Miller, Strohs, Coors, Pabst, etc.—became the drink of the masses. In 1995, American brewers produced 185 million barrels of beer, 176 million of which were consumed in the United States. The vast majority of the beer produced in the United States—over 95 percent—is produced by the major brewers, Anheuser-Busch, Miller, Strohs, Heileman, Coors, and Pabst. However, craft brewers have kept ancient brewing traditions alive and in the 1990s offer their microbrews to a growing number of beer drinkers looking for an alternative to mass-produced fare.

It is no exaggeration to say that beer came to America with the first colonists. Indeed, there is evidence that suggests that one of the main reasons the Mayflower stopped at Plymouth Rock in 1620 was that they were running out of beer. Had they made it to New Amsterdam they might have replenished their stock with ales made by the Dutch settlers who had been brewing beer there since 1612. The first commercial brewery opened in New Amsterdam in 1632 and as the colonies expanded many a small community boasted of a local brewer. But the failure of colonists to grow quality barley (a key ingredient in beer) and the easy availability of imported English beer slowed the development of an indigenous brewing industry. As tensions between the colonies and England increased in the eighteenth century, beer became one of a number of British goods that were no longer wanted by colonists eager to declare their independence. By 1770, George Washington and Patrick Henry were among the many revolutionaries who called for a boycott of English beer and promoted the growth of domestic brewing. Some of the first legislation passed by the fledgling United States limited the taxes on beer to encourage such growth. Thomas Jefferson and Benjamin Franklin both supported a plan to create a state-supported national brewery (the plan came to naught.)

The nineteenth century saw a tremendous growth in brewing in America. Immigrants from the "beer belt" countries of Europe—Ireland, Germany, Poland, Czechoslovakia, and The Netherlands—brought their brewing knowledge and love of beer to many American communities, and by 1840 there were over 140 breweries operating in the United States. In that same year America was introduced to lager beer by a Bavarian brewer named Johann Wagner. Little did he know that he had introduced the future of American brewing. Prior to 1840, the beers produced in America were all ales, defined by their use of a top-fermenting yeast and aged and served at room temperature. Lagers—which used a bottom-fermenting yeast and required cold storage—tended to be mellower, smoother, and cleaner tasting, and they soon found an audience, especially when Bohemian brewers developed the Pilsner style, the lightest, clearest lager made. Milwaukee, Wisconsin—with its proximity to grain producers, its supply of fresh water, and its large German population—soon became the capital of American brewing. The Pabst, Schlitz, and Miller Brewing companies all trace their roots to nineteenth-century Milwaukee. In fact, Schlitz claimed for many years to the "beer that made Milwaukee famous."

Milwaukee was not alone in embracing beer, especially lager beer. By 1873 there were over 4,131 breweries operating in the United States and they produced nine million barrels of beer, according to Bill Yenne in Beers of North America. Most of the twentieth century's major brewers got their start in the late nineteenth-century boom in American brewing, including Anheuser-Busch (founded in 1852), the Miller Brewing Company (1850), the Stroh Brewery Company (1850), the G. Heileman Brewing Company (1858), the Adolph Coors Company (1873), and the Pabst Brewing Company (1844). Adolphus Busch, who some hail as the first genius in American brewing, dreamed of creating the first national beer, and by the 1870s the conditions were right to begin making his dream a reality. Backed by a huge brewery, refrigerated storehouses and rail cars, and a new process allowing the pasteurization of beer, Busch introduced his new beer, called Budweiser, in 1876. But the majority of the brewers were still small operations providing beer for local markets. It would take industrialization, Prohibition, and post-World War II consolidation to create the monolithic brewers that dominated the twentieth century.

At the dawn of the twentieth century several factors were reshaping the American brewing industry. First, large regional brands grew in size and productive capacity and began to squeeze competitors out of the market. New bottling technologies allowed these brewers to package and ship beer to ever-larger regions. Such brewers were aided by new legislation that prohibited the brewing and bottling of beer on the same premises, thus ending the tradition of the local brewhouse. "The shipping of bottled beer," notes Philip Van Munching in Beer Blast: The Inside Story of the Brewing Industry's Bizarre Battles for Your Money, "created the first real emphasis on brand identification, since shipping meant labeling, and labeling meant
imagery." All these factors helped big brewers get bigger while small brewers left the industry. By 1910 the number of breweries had decreased to 1,568, though they produced 53 million barrels of beer a year. With fewer breweries producing more beer, the stage was set for the next century of American brewing. There was only one problem: numbers of Americans supported placing restrictions on alcohol consumption and they soon found the political clout to get their way.

For a number of years nativist Protestants, alarmed by the social disorder brought to the United States by the surge of immigrants from eastern and southern Europe, had been pressing for laws restricting the sale of alcohol, hoping that such laws would return social order to their communities. Fueled by anti-German (and thus anti-brewing) sentiment sparked by Germany's role in World War I, such groups as the National Prohibition Party, the Woman's Christian Temperance Union, and the Anti-Saloon League succeeded in pressing for legislation and a Constitutional Amendment banning the "manufacture, sale, or transportation of intoxicating liquors." The Volstead Enforcement Act, which went into effect on January 18, 1920, made the brewing of beer punishable under the law. "What had been a normal commercial activity one day," writes Penne, "was a criminal act the next." Small and medium-sized breweries across the nation closed their doors, and the big brewers turned their vast productive capacity to producing near beer (with names like Vivo, Famo, Luxo, Hoppy, Pablo, and Yip) and other non-alcoholic beverages. As a method of social control, Prohibition—as the period came to be known—failed miserably: American drinkers still drank, but now they got their booze from illicit "speakeasies" and "bootleggers," which were overwhelmingly controlled by organized crime interests. Crime increased dramatically during Prohibition (or at least anti-Prohibition interests made it seem so) and the politicians who were against Prohibition, energized by the political realignment caused by the start of the Great Depression and the election of Franklin D. Roosevelt, repealed Prohibition by December of 1933.

The effects of Prohibition on the brewing industry were dramatic. Only 400 of the country's 1,568 breweries survived Prohibition, and half of these failed during the Depression that gripped the country throughout the 1930s. The big breweries survived, and in the years to come they would claim an ever-increasing dominance in the American beer market. Big brewers were aided in 1935 by the introduction of canned beer. Though brewers first put beer in tin or steel cans, Coors introduced the aluminum can in 1959 and it was quickly adopted by the entire brewing industry. More and more, beer was a mass-produced product that could be purchased in any grocery store, rather than a craft-brewed local product purchased at a local alehouse. But American brewing did not rebound immediately upon repeal of Prohibition. The economic troubles of the 1930s put a damper on
production; in 1940, American brewers produced only 53 million barrels of beer, "well below the pre-Prohibition peak of 66 million barrels," according to Yenne. It would take World War II and the post-war boom to spark a real resurgence in American brewing.

As World War II drew increasing numbers of American men off to foreign bases, military leaders wisely decided to permit the sale of beer on military bases. Brewers obliged by allocating 15 percent of their production for the troops and, according to Yenne, "young men with long-standing loyalties to hometown brews were exposed to national brands," thus creating loyalty to these brands that they carried home. Brewers also took advantage of an expanding American economy to increase their output to 80 million barrels annually by 1945.

The story of post-War American brewing can be summed up in two words: nationalization and consolidation. Anheuser-Busch, Schlitz, and Pabst set out to make their beers national brands by building breweries in every region of the United States. In the years between 1946 and 1951, each of these brewers began to produce beer for the New York market—once dominated by Ballantine, Rheingold, and Schaefer—from newly-opened breweries. Soon they built breweries, giant breweries, on the West Coast and in the South. By 1976 Anheuser-Busch alone had opened 16 new breweries in locations throughout the United States. The other major brewers followed suit, but no one could keep up with Anheuser-Busch. By 1957 the company was selling more beer than any brewer in the United States, a position it has not relinquished since.

Nationalization was followed by consolidation, as the major brewers began acquiring smaller brewers at an astonishing pace and either marketing or burying their brands. According to Van Munching, "In the sixties and seventies following the American beer business was like going to a ball game. To keep track of the players, you needed a scorecard." G. Heileman of Wisconsin purchased smaller regional brewers of beers like Old Style, Blatz, Rainier, and Lone Star; Washington brewer Olympia bought Hamms, but was in turn bought by Pabst. But the biggest buy came when tobacco giant Philip Morris purchased the Miller Brewing Company in 1970. Backed by Philip Morris's deep pockets, Miller suddenly joined the ranks of the country's major brewers. Van Munching claims that the purchase of Miller "signaled the end of an era in the brewing industry: the end of skirmishes fought on a strictly regional scale, often with different contestants in each of the regions. Now, one battlefield was brought into sharp focus … the whole U.S. of A." From 1970 on, the major national brewers battled fiercely for market share with a sophisticated arsenal of advertising, promotions, brand diffusion, and bluster.

In a market in which the major brands had little difference in taste, the biggest tool the brewers had to increase market share was advertising. The first brewer to turn its full attention to the promotion of its product on a national scale was Miller, which in the early 1970s began an unprecedented push into the sports marketplace. Miller advertised its brands on every televised sporting event it could get its hands on, from auto racing to football. While it pitched its flagship brand, Miller High Life, with the slogans "If you've got the time, we've got the beer" and the tag line "Miller Time," Miller attracted the most attention with its ads for the relatively new Lite Beer from Miller that featured drinkers arguing whether the beer "Tastes Great" or was "Less Filling." For a time, Miller dominated the available air time, purchasing nearly 70 percent of network television sports beer advertising. But Anheuser-Busch wasn't about to let Miller outdo them, and they soon joined in the battle with Miller to dominate the airwaves, first purchasing local television air time and later outbidding Miller for national programs. With their classy Budweiser Clydesdales, "This Bud's for You," and the "Bud Man," Budweiser managed to retain their leading market share. Between them, Anheuser-Busch and Miller owned American television beer advertising, at least until the others could catch up.

Both Budweiser and Miller devoted significant resources to sponsoring sporting teams and events in an effort to get their name before as many beer drinkers as possible. Budweiser sponsored the Miss Budweiser hydroplane beginning in 1962, and beginning in the early 1980s regularly fielded racing teams on the NASCAR, NHRA, and CART racing circuits. Moreover, Budweiser sponsored major boxing events—including some of the classic championship fights of the 1980s—and in the late 1990s paired with a number of sportsmen's and conservation organizations, including Ducks Unlimited and the Nature Conservancy. For its part, Miller sponsored awards for National Football League players of the week and year, funded CART, NASCAR, and drag racing teams, and in the late 1990s started construction on a new baseball stadium, called Miller Park, for the aptly named Milwaukee Brewers. Miller has also put considerable resources into funding for the arts, both in Milwaukee, where it has sponsored annual ballet productions, and in other cities throughout the country. These brewers—and many others—also put their name on so many t-shirts, hats, banners, and gadgets that beer names sometimes seemed to be everywhere in American culture.

When American brewers couldn't expand their market share through advertising, they tried to do so by introducing new products. The first such "new" beer was light beer. The Rheingold brewery introduced the first low-calorie beer, Gablinger's, in 1967, but the taste was, according to Van Munching, so "spectacularly awful" that it never caught on. Miller acquired the rights to a beer called Meister Brau Lite in 1972 when it purchased the Meister Brau brewery in Chicago, and they soon renamed the beer and introduced it the same year as Lite Beer from Miller. Offered to drinkers worried about their protruding beer bellies, and to women who didn't want such a heavy beer, Lite Beer was an immediate success and eventually helped Miller overtake Schlitz as the number two brewer in the country. Not surprisingly, it spawned imitators. Anheuser-Busch soon marketed Natural Light and Bud Light; Coors offered Coors Light; Stroh's peddled Old Milwaukee Light. There was even an imported light beer, Amstel Light.

Light beer was an undoubted success: by 1990, the renamed Miller Lite led sales in the category with 19.9 million barrels, followed by Bud Light (11.8 million barrels) and Coors Light (11.6 million barrels). Following the success of light beer, beermakers looked for other similar line extensions to help boost sales. Anheuser-Busch introduced LA (which stood for "low alcohol") and others followed—with Schaefer LA, Blatz LA, Rainier LA, etc; the segment soon died. In 1985, Miller achieved some success with a cold-filtered, nonpasteurized beer they called Miller Genuine Draft, or MGD; Anheuser-Busch followed them into the market with several imitators, the most flagrant being Michelob Golden Draft (also MGD), with a similar bottle, label, and advertising campaign. Anheuser-Busch created the dry beer segment when it introduced Michelob Dry, followed shortly by Bud Dry. Their advertising slogan—"Why ask why? Try Bud Dry"—begged a real question: Why drink a dry beer? Consumers could think of no good reason, and the beers soon disappeared from the market. Perhaps, thought brewers, an ice beer would be better. Following Canadian brewer Molson Canada, Miller
introduced Molson Ice in the United States in 1993; they were, once again, followed by many imitators and, once again, the category slowly fizzled after a brief period of popularity.

Though the attempts of American brewers to create new beer categories appeared to be a comedy of errors, there was reason behind their madness. Simply put, the market for their beers had grown stagnant and the same brewers were competing for a market that was no longer growing substantially. Many brewers sought to expand by peddling wine coolers or alternative beverages, such as Coors's Zima Clearmalt; most hastened their efforts to sell their beer in the international market. Anheuser-Busch, for example, began to market its beer in more than 60 countries worldwide. Still, the question was if American drinkers weren't drinking the "new" beers produced by the major brewers, what were they drinking? In the simplest terms, the answer was that more and more Americans were drinking "old" beers—carefully crafted ales and lagers with far more taste and body than anything brewed by the "big boys." Beginning in the late 1970s, the so-called "microbrew revolution" proved to be the energizing force in the American beer market.

American capitalism has proved extremely adept at producing and marketing vast numbers of mass-produced goods, and American brewers are quintessential capitalists. But with mass production comes a flattening of distinctions, a tendency to produce, in this case, beers that all taste the same. Beginning in the late 1970s and accelerating in the 1980s, American consumers began to express a real interest in products with distinction—in gourmet coffee (witness the birth of Starbucks and other gourmet coffee chains), in good cars (thus rising sales of BMW, Mercedes, and Japanese luxury brands Lexus and Acura), and in fine clothes (witness the rise of designers Ralph Lauren and Calvin Klein). The changing taste of American beer drinkers was first expressed as a preference for imported beers, which surged in sales in the late 1970s. But true beer connoisseurs soon turned to beer brewed closer to home. In 1977 the New Albion brewing company in Sonoma, California, offered the first American "microbrew," the name given to beer brewed in small batches. The first major microbrewer, the Sierra Nevada Brewing Company of Chico, California, opened in 1981, and was followed into the market by a succession of breweries first in the West and then throughout the country.

One of the first microbrewers to enter the national market was the contract-brewing Boston Beer Company, producers of the Samuel Adams Boston Lager and other beers, but for the most part the microbrew revolution was not about following the path of the big breweries into national marketing, but rather about producing high quality ales for the local market. In small-and medium-sized markets around the country, American beer drinkers were rediscovering the richness and variety of the brewer's art. In the microbrewing capital of the United States, the Pacific Northwest, alehouses can boast of carrying dozens of beers brewed within a day's drive. At places like Fred's Rivertown Alehouse in Snohomish, Washington, a group called the Cask Club even joined in the revival of one of the oldest brewing traditions—cask-conditioned or "real" ales.

Though the microbrew revolution wasn't big—craft-brewed beers only accounted for 2.1 percent of the domestic beer market in 1995—it exerted a great influence on the major brewers. Most of the big brewers responded to the challenge posed by microbrewers by marketing slightly richer, slightly better beers with "authentic" looking labels. Miller marketed beers under the label Plank Road Brewery and Michelob promoted its dark and amber beers. Miller responded most ingeniously by claiming in advertisements that it was "time for a good old macrobrew," brewed in one of their "vats the size of Rhode Island." Meanwhile microbreweries, brewpubs, and regional specialty brewers kept opening; by 1995 there were 1,034 such breweries in the United States, heralding a return to the abundance of breweries that existed at the turn of the century, and a dramatic rise from the 60 breweries in existence in 1980.

It comes as no surprise that a drink as popular as beer should play a role in American entertainment. Beer could have been credited as a character on the long-running sitcom Cheers (1982-1993), which featured a group of men who felt most at home sitting in a Boston bar with a beer in their hands; the biggest beer drinker, Norm, perfected humorous ways of asking for his beer, and once called out "Give me a bucket of beer and a snorkel." Milwaukee's fictional Schotz Brewery employed the lead characters in the 1970s sitcom Laverne and Shirley (1976-1983). When Archie Bunker of All in the Family (1971-1979) left his union job he opened a bar—Archie's Place—that served beer to working class men. The characters on the Drew Carey Show (1995—) brewed and marketed a concoction they called Buzz Beer, and signed a professional wrestler to do celebrity endorsements. Homer Simpson, the father on the animated series The Simpsons (1989—) swore his allegiance to the locally-brewed Duff Beer. (The show's producer, Twentieth Century-Fox, sued the South Australian Brewing Company when it tried to market a beer under the same name). Movies have not provided so hospitable a home to beer, though the 1983 movie Strange Brew followed the exploits of beer drinking Canadians Bob and Doug McKenzie as they got a job at the Elsinore Brewery.

In the 1990s, with more beers than ever to choose from, Americans still turned with amazing frequency to the major brands Budweiser, Miller, and Coors. Such brands offered not only a familiar, uniform taste, but were accompanied by a corresponding set of images and icons produced by sophisticated marketing machines. Drinkers of the major brands found their beer on billboards, race cars, television ads, store displays, and t-shirts everywhere they looked; by drinking a Bud, for example, they joined a community unique to late-twentieth-century mass culture—a community of consumers. But for those who wished to tap into the age old tradition of brewing, an increasing number of brewers offered more authentic fare.

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